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Hi John. Could you please help me with this question. I got the right answer but I don’t understand the logic behind it.
As with all expenses we only charge in the SOPL the amount used during the period.
If you buy oil but still have some of it left at the end of the year then you haven’t used it (the amount left will be used in the following year).
And yes, if you have any left at the end of the year it is inventory and will appear on the SOFP.
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